Highlights
– Setting IFRS® Sustainability Disclosure Standards
– Driving connectivity between financial and sustainability reporting
– Have your say – Comments due by 28 March 2025
The Due Process Handbook (the Handbook) of the IFRS Foundation currently outlines the processes to follow when setting IFRS® Accounting Standards.
The Trustees of the IFRS Foundation have proposed updates to the Handbook to:
- specify formally the due process for setting IFRS Sustainability Disclosure Standards;
- introduce a process to drive connectivity between financial and sustainability reporting; and
- provide clarifications and enhancements in other areas.
Setting IFRS Sustainability Disclosure Standards
Since its inception, the International Sustainability Standards Board (ISSB) has been developing new standards according to the process specified in the Handbook for the International Accounting Standards Board (IASB).
The Trustees propose to update the Handbook to:
- formally specify the ISSB’s due process;
- include specific due process for SASB1 Standards and the related taxonomy; and
- clarify that the IASB and the ISSB (the Boards) follow the same due process, except for some specific differences.
Driving connectivity between financial and sustainability reporting
The IASB and ISSB aim for their respective requirements to work well together to provide a comprehensive package of information for users. To better meet this objective, the proposals introduce a process to:
- facilitate knowledge-sharing and coordination between the Boards;
- consider opportunities for connections between the Boards’ respective work plans; and
- develop standards that are compatible and consistent with each other.
Other proposed updates
Other proposed updates include the following.
| Area | What’s proposed? | What’s the impact? |
| Post-implementation reviews (PIRs) | Clarify the objective and process | Focus on whether standards are working as intended when developed |
| Minor improvements to IFRS Standards | Expand the scope | Allow the inclusion of minor or narrow-scope amendments to IFRS Standards or accompanying material (e.g. guidance or illustrative examples) |
| IFRS Interpretations Committee – Criteria for a new standard-setting project | Clarify the ‘widespread effect’ criterion | A widespread effect would be when the circumstance or transaction is prevalent and there is diversity in the application of IFRS Accounting Standards |
| Re-exposure criteria | Delete the requirement to give more weight to changes in recognition and measurement | Changes to disclosures would have equal weight when considering whether re-exposure is necessary |
What’s next?
Have your say on the proposals to amend the due process for setting high-quality IFRS Standards. The proposals are open for comment until 28 March 2025.
For further information, speak to your KPMG contact.
1 Sustainability Accounting Standards Board.
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